Riskless transactions to take advantage of profit opportunities ...

[shofmannx20]

Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called
 
  A) differential actions.
  B) cash transactions.
  C) arbitrage.
  D) forward transactions.

Question 2

What are the consequences of outsourcing production on the welfare of countries?
 
  What will be an ideal response?

[CourtneyCNorton]

Answer to Question 1

C

Answer to Question 2

By taking advantage of cost differentials between countries, both countries can enjoy gains from trade. However, income distribution effects will result in winners and losers. Gains from trade are therefore thought of in terms of net gains in which the winners could compensate the losers and still be better off.